York residents named in $11M insurance fraud suit

State Farm Canada has launched an $11-million lawsuit, claiming insurance fraud against a Toronto health centre and five people who worked there, two of whom live in Vaughan.

The Aurora-based firm is asking for $3 million in damages for fraud, $3 million in damages for conspiracy and another $5 million in aggravated and punitive damages, according to its statement of claim.

In its claim, State Farm said false invoices or treatment plans for medical or rehabilitation regimes were submitted by the company, Assessment Direct Inc.

In all, the documents say $1.4 million was paid out for services or devices that were not recommended or provided by the health professional who allegedly signed the documentation.

In more than one case, the company said doctors, whose signatures were placed on forms, say they did not complete or approve the forms, work for the company or provide the alleged treatments.

In other cases, State Farm claims doctors and other health practitioners, who did work for the company, reported they never approved the use of their electronic signatures in certain cases.

The news comes weeks after the province announced a renewed effort to tackle insurance fraud.

The proposed rule changes are about insurers working with claimants to ensure organized rackets, including unscrupulous medical providers, do not fly under the radar, according to those in the industry.

“We will not sit idly by and simply pay out on these fraudulent claims,” State Farm Canada spokesperson John Bordignon said.

In the past two years, York Regional Police has investigated staged crash rings, including one responsible for an October 2011 crash in Georgina and another in Vaughan in 2009.

In November, York police announced the arrest of 14 people — including seven York residents — after linking them to what it believes was an organized crime group that may have been responsible for as much as $50 million in insurance fraud.

Last year, Toronto Police announced 37 people, including five Markham residents, were charged after a three-year probe exposed what is believed were staged vehicle collisions and phoney insurance claims issued by physiotherapy clinics for insurance windfalls.